The fourth quarter is off to a shaky start for U.S. stocks, but the October sell-off may have created some buying opportunities for long-term investors. The S&P 500 index has pared some of its 2018 gains to start off the quarter but remains up 2.7 percent year-to-date. With a number of uncertainties surrounding the November midterm elections, third-quarter earnings season and the ongoing trade war, stock selection is critical in today’s market. The Bank of America analyst team recently selected the following eight stocks as its best stocks to buy for the fourth quarter.
CVS Health Corp. (CVS)
CVS recently received the green light from the Department of Justice to proceed with its acquisition of Aetna (AET). While the approval is still conditional at this point, analyst Michael Cherny says the go-ahead removes a major uncertainty for investors. Cherny says CVS has an opportunity to re-shape the health care industry by creating a “Store of the Future,” which will integrate CVS and Aetna data, analytics and services into CVS stores and morph them into health care service destinations. Bank of America has a “buy” rating and $90 price target for CVS stock.
First Bancorp Puerto Rico (FBP)
Analyst Ebrahim Poonawala says the ongoing rebuilding efforts following Hurricane Maria’s destruction in Puerto Rico could potentially create a major long-term stimulus for the Puerto Rican economy. If Puerto Rico can get its economy on track, Poonawala says First Bancorp Puerto Rico may soon generate the type of cash flow that would allow the company to improve its balance sheet, reduce its level of non-performing assets and even possibly return capital to investors. Bank of America has a “buy” rating and $11.50 price target for FBP stock.
Norwegian Cruise Line Holdings (NCLH)
The wave of large hurricanes in 2018 may have spooked investors because cruise stocks like Norwegian Cruise Line Holdings have lagged the market. However, analyst Andrew Didora says Bank of America’s credit card data suggests strong demand from customers. Early 2019 commentary from management has been positive up to this point. Rising oil prices will continue to pressure margins, but Didora says cruise prices are also trending higher. With an earnings multiple of only 12, Norwegian offers investors the best value of the group. Bank of America has a “buy” rating and $72 price target for NCLH stock.
Nokia Oyj (NOK)
Expectations for Nokia were…
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